The repair of bone tissue injuries, especially those occurring in the craniofacial region, is a significant challenge in orthopaedics. There are currently few effective treatments available for these injuries. Tissue engineering seeks to repair or replace the damaged tissue by encouraging regeneration of the host tissue through provision of the necessary biochemical, cellular, and mechanical cues. Human mesenchymal stem cells (hMSCs) are a promising cell source for bone regeneration as they are capable of differentiating into osteogenic tissue, are easily obtainable from bone marrow, and can proliferate in culture readily so that it is possible to obtain a sufficient number of cells for tissue engineering approaches. RNA interference is a powerful gene silencing mechanism that inhibits gene expression at the translational level by the targeted destruction of specific mRNA molecules, and has the potential to revolutionize disease treatment and aid in the functional repair of damaged tissue by decreasing the expression of specific proteins. Additionally, the potential for delivering short interfering RNA (siRNA) to stem cells to direct their differentiation to promote the desired tissue growth is exciting. However, effectively delivering bioactive siRNA to damaged tissue sites remains a challenge, and more research is needed to determine its effectiveness in the differentiation of hMSCs and enhancement of resultant tissue formation. Thus, this proposed work seeks to engineer novel biomaterial systems for controlled and sustained delivery of siRNA and to examine the effect of delivering siRNA against BMP antagonists on the osteogenic diferentiation of hMSCs and bone formation. The central hypothesis is that silencing the expression of BMP antagonists via controlled delivery of siRNA will promote the osteogenic response of hMSCs, and enhance bone regeneration. This will be addressed by the following specific aims: (1) engineer novel biopolymer hydrogels capable of releasing siRNA in a sustained and controllable manner over time, (2) deliver siRNA against a BMP antagonist from biopolymer hydrogels and investigate its effect on guiding encapsulated and surrounding hMSCs down the osteogenic lineage and (3) assess the ability of the system to drive bone formation in vivo upon implantation of hydrogel constructs containing siRNA and hMSCs into a critical-size bone defect. This proposal aims to demonstrate the utility of a new approach to improve the repair of bony defects, which would have great clinical benefit, in addition to creating a platform technology that could then be used for other therapeutic applications.